The Study Of Antitrust Legal Regulations On Abuse Of Market Dominance By Internet Companies

The internet market in21st Century has rapidly grown into a new future-orientedmarket economy form, which becomes the main economic pattern and also the growthpoint of the economy in the internet era. While facing the chaos of domestic internetmarket competition, as well as the out-dated anti-monopoly regulation, our existingantitrust law does not only hinder the rapid and healthy growth of internet market, butalso brings new challenges for protecting the competitive orders and the rights of theconsumers because of the lack of regulations for the internet enterprises’ behaviors ofabusing the dominant position such as in the construction of internet enterprise concept,theory, regulations and many other aspects. In this paper, under the situation of thediscordant of "market failure" and "regulatory failure" which is caused by theparticularity of internet companies’ abusing behaviors and also the hysteresis quality ofanti-monopoly regulation, basing on the theoretical foundation of antitrust regulatorytheory and the internet industry "R-SCP" theory, and also basing on the difference of theinternet enterprises from the traditional enterprises such as features of networking,bilateral, innovative, dynamic, and so on, it analyses the dilemma encountered in thedefinition of relevant market and the identification of market dominance and the abuse ofmarket dominance and finally proposes some creative suggestions by drawing lessonsfrom the well-known case and also the theories and empirical analysis results ofrepresentative countries in anti-monopoly regulation of internet companies abusingmarket dominance.The dilemma of the theory for identifying abusing behaviors of market dominanceof the internet companies mainly can be divided into three aspects: Firstly, because of thebilateral, dynamic and innovative features of the Internet companies, the definition of therelevant market of the Internet companies becomes narrow if based on static analysis ofthe needs of the unilateral market. Secondly, The cyber-effect feature of internetcompany decides that the dominant company will win in all aspects once they enter themarket firstly and took the dominant position, but the market share of the internetcompanies is always unstable in long term because of the features that the innovationcompetition is much greater than the price competition and also because of the special market structures that the market is both competitive and dynamic at the same time buteffect oppositely. So, it will be inaccurate to identify the dominant position of an internetcompany only by the market share. Thirdly, it is not easy to identify the abusingbehaviors of an internet company, because the behaviors such as predatory pricing, unfairpricing, price discrimination and so on has already become common behaviors topromote effective competition in the internet market and improve the internet marketefficiency.The theoretical analysis based on the particularity of internet companies and thecomplexity of the internet market structure highlights that it is really a thorny issue toconstruct the regulations of the abuse of market dominance of internet companies. InChina’s "anti-monopoly law," the legislative provisions on abuse of market dominance isover principles, it is still a blank in the anti-monopoly provisions of the abusingbehaviors of internet companies. Based on cases of the investigated companies such asChina Telecom, China Unicom and also the case of "3Q", this paper proposes that themain difficult part of solving China’s Internet companies antitrust regulations andproblems in the process of law enforcement lies in how to improve the relativeregulations of identifying the abusing of the market dominant positions of internetcompanies. Clarifying these theory issues based on the practice of law enforcement andjudicial practice is the main index to warn and hinder internet companies from abusingbehaviors and also the index for the anti-monopoly legislation, law enforcement andjudicatory.Based on legal researching spirit that the theory should be practice-oriented, thepaper launched the research on some important cases such as Internet companies’ pricediscrimination, refuse to make the trade and so on by using such important methods asthe combination of theoretical and empirical analysis, comparative study and laweconomics analysis and so on. It also proposes some countermeasures to establish andimprove the relevant laws, rules and regulations based on the existing "anti-monopoly".Firstly, it must implement the two basic principles to hinder the abusing behaviors,namely the precautionary principle of law enforcement, as well as the reasonableprinciple of law breaking identification principles. Secondly, it is suggested that whendefining the relevant market of Internet companies, the regulations methods should be revised by utilizing the economic analyzing method such as the approach of defining arelevant market based on the cross-network effect of bilateral market, so as to improvethe scientific of the method. It also proposes that the complementary role of factors ofmarket share and entering barriers must be fully considered when identifying the marketdominance of internet companies, so as to improve relevant laws and rules based on theInternet companies’ characteristics; The indentifying of the abuse behaviors shouldfollow the two-stage identifying system based on the characteristics of the differentabuses behaviors, so as to construct targeted identification standards. Thirdly, from theprocedural norms building of the anti-monopoly law aspect, it must improve thedistribution of the proofing responsibility to establish a "centralized definition" systemand reduce the proofing responsibility of plaintiff, besides it should improve thecommitment system, establish restrictions, symplify judicial procedures to ensure therapid recovery of the Internet market competition.Aiming at solving the new urgently topic that the antitrust regulations of the abuseof market dominance behavior at the present stage in China, by researching the basictheoretical basis of the antitrust regulations of the abuse of market dominance behavior indepth, basing on the judicial practice foundation, the paper commits to improve thetheoretical system of anti-monopoly regulation of Internet companies, thereby hopingthese initial theories to provide advice for the appropriate law enforcement and judicialof the abusing behaviors, so as to provide a theoretical reference for perfecting theantitrust law system and the Internet market legal mechanism.